Marketers chafe at Do-Not-Track proposal

Marketers reacted with weariness to the Federal Trade Commission (FTC) proposal to implement an online “Do-Not-Track” option that would allow consumers to opt out of all third-party tracking and behaviorally-targeted advertising.

The FTC suggested in a December report that the Do-Not-Track mechanism take the form of an add-on to the Web browser. It would enable consumers to check a box that would transmit their preference to opt out of tracking as they surf the Web. Companies would be held accountable for failing to honor the consumer's choice. The FTC said it hopes a universal mechanism would prevent consumers from having to opt out on a “company-by-company or industry-by-industry basis.”

Monica Luechtefeld, the global head of e-commerce at Office Depot, praised the FTC for calling for additional consumer education and clearer, shorter privacy policies. However, she disagreed with the structure of Do-Not-Track. Luechtefeld said she fears a broad implementation that would impact basic functionality on e-commerce sites, because cookies help move a shopper from selecting products onto the shopping cart.

“I think the aspiration of getting to these goals is good, but the simplistic solution of an on-off switch will enormously disrupt the consumer experience with their favorite vendors,” she said. “It would take us back to five years ago and make the experience far less personal.”

Paul Dunay, global managing director of services and social marketing at enterprise communications provider Avaya, derided the proposal as “too broad” and “too early.” He predicted its failure due to low consumer adoption rates.

“As a marketer, I like the fact that I can collect so much data,” he added. “It would hurt our ability to get a complete picture.”

While the FTC does not have legislative authority to implement the mechanism on its own, it appears to be pushing for regulation.

“From my perspective…a legislative solution will surely be needed if the industry doesn't step up to the plate,” Jon Leibowitz, FTC chairman, told reporters during a December 1 teleconference. The FTC is collecting feedback on the proposal through February 28. It will use those comments to issue another report in 2011.

The FTC report chided the marketing industry for having “fallen short” in self-regulation, a charge the Direct Marketing Association (DMA) disputes.

“We strongly disagree with them that self-regulation is not working,” said Linda Woolley, EVP of government affairs at the industry association.

In October, the DMA — along with other media and marketing trade groups, such as the American Association of Advertising Agencies — introduced a self-regulatory program that encouraged businesses to add an advertising opt-out icon to their websites. The Advertising Option Icon program also allows consumers to opt-out of tracking.

Woolley called a ‘Do-Not-Track' mechanism enforced by the federal government “completely premature.”